Trenton, New Jersey's City Hall on East State Street, early in the morning on June 21, 2011. Michael Mancuso/The Times

TRENTON — For years, Trenton officials have preached auctioning city-owned properties as a way to unload vacant sites, get boarded-up homes and neglected lots cleaned up and back on the city tax rolls and infuse the city budget with a quick hit of cash.

Last month, at an “Ask the Mayor” session, one resident asked Mayor Tony Mack how the city could reduce its proposed 19-cent tax rate increase.

“One way is increasing revenues,” Mack answered. “We want to sell all vacant, city-owned properties to put those properties back on the tax rolls to offset the burden of what people are paying now. We’re trying to do that now, but we’re very, very short-staffed.”

City officials blame that lack of staff for slowing efforts to close sales and collect final bids on auctioned-off properties.

A review of city records shows that while 36 city-owned properties were auctioned off last December, none of the sales have closed. Bidders paid their 20 percent deposit to the city — amounts that ranged from $120 to $10,040 — but sales have not been finalized and the properties still remain in the city’s hands, uninhabited and untaxed.

Waiting and waiting

“I got a down payment on something I can’t do anything with,” John Scarpati Sr. said. “It has no closing.”

Scarpati, owner of the Scarpati’s Recycling scrap business on New York Avenue, bid $35,000 last year for three properties on Garfield Avenue, one a vacant lot, the other a commercial duplex. His salvage yard is running out of space and he planned to store some dump trucks and materials at the lot and fix up and possibly rent the business space there to a contractor or local business.

He put down a deposit of roughly $7,000 and waited to hear back from the city about a closing date. And waited, and waited.

City staff have given him few answers about the holdup, he said. He was told the city didn’t have a lawyer to conduct the closings and that he needed to hire a company to do a title search, he said.

In the meantime, even if a closing occurs soon, it’s unlikely he’ll put much work into the properties now that winter has arrived.

To add insult to injury, while he was waiting for the property titles to become his, someone broke into one of the buildings.

“Because they waited so long, people broke in there,” he said. “I wasn’t supposed to go in there but I put chains and locks on the door myself.”

Speaking through a translator, Blanca Riascos, another December 2011 bidder who put deposits on two properties on Adeline and South Broad streets, said her sales haven’t closed either but said she talked to city staff, was satisfied with their explanation and hoped to finalize the sales in January.

More lawyers needed

City officials confirmed there have been no closings from the December 2011 auction, blaming the delay on a lack of lawyers and staff needed to process the real estate transactions.

“It’s true, we had an auction in December 2011 and I don’t believe we’ve closed on any of the properties,” acting housing and economic development director J.R. Capasso said. “Since I’ve been in charge the last 90 days we’ve made some progress, had some outside legal firms working to work through title searches. The bottom line is, there’s no staff allocated to do real estate work.”

Business administrator Sam Hutchinson said he was trying to hire three more lawyers for the legal department, including one sole real estate practitioner.

“The fact is we don’t have a closing attorney,” he said. “We don’t have anyone to do closings. We are in the process of hiring more staff in legal to address some of that.”

Capasso said the housing and economic development department just did not have enough staff, period.

“It’s just generally an issue of staffing,” he said. “There’s just too much work and not enough people, but we’re working on it.”

The city has held two city-owned property auctions since Mack took office — one in November 2010 and the other in December last year. More than 90 properties were auctioned off on the two dates, with contractors, residents and other investors bidding a total of roughly $581,000, including $201,700 for the December 2011 auction.

Many of the properties are in disrepair and fetched bids as low as $1,100. Others, like a former gas station on East State Street, sold for a high of $50,200 to Isam Abuhumoud, the cofounder of Kaars Inc., a city scrap and towing business. Abuhumoud and brother
Nedal were both named in FBI search warrants after federal agents raided City Hall in July, two months before Mack was arrested for allegedly accepting thousands of dollars in bribes.

Other bidders included local contractors, an East Windsor realty firm, a Manalapan landscaping company and residents from Elizabeth, Sicklerville and Neptune. As part of the deal, bidders must procure all necessary city licenses for the properties, submit a timeline showing how the property will be completely rehabilitated within 18 months of closing and agree to keep the property owner-occupied for a period of 10 years.

But until the sales close, the city can’t collect the remainder of the sales price. Records show that even when the sales are closed, the now-private properties don’t always generate the expected tax income for the city.

Of the 57 city-owned properties auctioned off in 2010, just 21 are currently on the city’s tax rolls, according to data from the city tax collector. The city billed more than $76,000 in taxes on the properties, but many tax payments are late or liens have been placed on the properties. Of the $76,473 billed, just $36,716 has been collected, slightly less than half of the taxes levied on the properties.